Why Hosting affiliate programs pay so much money?

[melvin]

I've been promoting hosting affiliate programs since last year but its just now that I wonder why these hosts pay so much for their affiliates? I mean how the fuck can they pay $50 for every user who signs up at $5 hosting plan?

Is it because after all they can scrub all the referrals that an affiliate makes or what?

 

[Cupid Stunt]

- Hosting affiliates shave like crazy.
- They know their average customer value, and their average customer stays much longer than 1 month.
- They have to be competitive in a highly saturated niche.
- Upsells to other plans, they bank when a customer registers a domain through them for like $5 more than they should pay etc.

 

[subigo]

The companies that offer that much were started with a bankroll in the millions and they deny your referrals for the smallest of things. Hostgator and Lunarpages still owe me thousands from a few years ago.

 

[vgeek]

Marginal cost per user is negligible in most cases, so they bank on upsells and revenues in excess of the referral commissions.

 

[tvmatt]

Most require 1-2 year commitments, and upsells are good. For others, they've just got marketing budgets that are large & may not be looking specifically on cost-per-acquisition. I used to be in hosting, it's a fiercely competitive game - it's almost a commodity for most users.

 

[warling]

1. Competition is high, they have to pay good money.
2. They're still paying you less than what the customer is worth to them.

/thread.